Question : Choose the correct statement:
Statement 1: Cross-sectional Analysis compares a firm's ratios to those of a few chosen companies in the same industry or to the industry average at the same period. A similar comparison is beneficial in determining the firm's relative performance.
Statement 2: Comparing a company's present ratios to its prior ratios is another technique to make comparisons using time-series analysis.
Option 1:
Statement 1 is correct, Statement 2 is wrong
Option 2: Statement 2 is correct, Statement 1 is wrong
Option 3: Both Statements are correct
Option 4: Both Statements are wrong
Correct Answer: Both Statements are correct
Solution : Cross-sectional Analysis means comparing a firm's ratios to those of a few chosen companies in the same industry or the industry average at the same period. A similar comparison is beneficial in determining the firm's relative performance. And to compare a firm's current ratios with its historical ratios called time-series analysis. Hence, the correct option is 3.
Question : Choose the correct statement
Statement 1: In order to interpret financial statements in a useful way, ratio analysis involves a comparison that provides a good interpretation of the financial statement. Statement 2: An individual ratio by itself cannot determine
Question : Statement 1: Current Ratio of 2:1 is considered an Ideal Ratio.
Statement 2: Quick Ratio of 1:1 is considered an Ideal Ratio.
Question : Which of the following is the Objective of Ratio Analysis?
Question : Statement 1: The supervisor's role includes providing technical guidance and feedback.
Statement 2: The supervisor's role is limited to assigning tasks to employees.
Question : Statement 1: The supervisor's role involves guiding, instructing, and motivating employees.
Statement 2: The supervisor's role is limited to monitoring employee activities.
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